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Daily Reaction: The Unspoken Problem with Piracy

January 11, 2013 Written by Sebastian Moss

Piracy is a controversial topic that often leads to heated debates over how much it really impacts profits and game revenues, with some saying it is killing the games industry and others saying that it might even have positive benefits. But a new interview has highlighted another problem – how the mere notion of it can put off publishers from creating new games. Daily Reaction discusses.

Seb: DreamRift’s co-founder Peter Ong recently brought up a very interesting, and sadly very real, outcome to the spread of piracy – publisher panic. In an interview with Gamasutra, he noted how publishers wouldn’t fund games on the DS because of the apparent spread of piracy, and how he worries the 3DS being hacked will significantly impact his studio and the number of games they can release. Worse, he said that publishers end up funding casual games because they believe casual gamers are less likely to pirate.

This means that, even if piracy itself doesn’t impact a game’s sales that much, the fear of piracy does impact a game’s sales because it may not even be developed.

Piracy is a problem, ignoring it and saying it isn’t is just stupid. Yes, I do know that if a million people pirate God of War, that isn’t equivalent to a million lost sales because most of them wouldn’t have bought it – but some still would have. Yes, I do know that some people pirate a game, and then buy it, something commenters always love to point out – but the vast majority simply pirate it. Yes, I do know that awful publisher tactics like DRM can drive people to piracy, but that can’t be used as a blanket excuse.

Here’s the thing about games: You do not need to play them. If you’re poor and can only afford a few games a year, I’m sorry, that’s capitalism. I have no problem with people stealing bread and water to live, but games are a luxury. Go tell Oxfam and United Way that you’re desperate for Call of Duty.

There are justifications for piracy, but they are overused by many pirates, and it is a problem. It’s hard to say just how much piracy directly affects the sales of a game – there are too many examples showing conflicting evidence – but this interview shows the clear indirect outcome of piracy: publisher desertion. This is one of the reasons why the 71million+ selling PSP failed to have any publisher support. A bunch of games got pirated and, even though that in itself wasn’t a problem, the perception of the PSP as a pirate’s device began to spread among the publishers. They got scared. They have investors who need results, and they can’t afford to spend millions on a game that might not make returns. You might call these publishers idiots in the comments, and you might be right, but that can’t be changed. They’re going to continue being scared of platforms that are pirated, so god help us all if the Vita is hacked. It’s barely getting support as it is.

What the spread – or the fear of a spread – is simply doing, is pushing us towards a cloud-only future at an uncomfortably fast rate. At the moment, we’re hardware-only, but, over the next decade or so, things will become increasingly cloud-based. At some point, the number of people who can’t access the cloud will be less than the perceived number of pirates, so publishers will make the decision to switch over to just being on the cloud, because only they will have the game, making piracy almost impossible. The problem is, they’ll push for this sooner than they should, because they’ll think the anti-piracy deterrent is worth disadvantaging innocent gamers who just happen to have bad internet.

Dan: While it is easy to find loopholes to justify pirating a game, the reality of the situation outweighs any arguments that for some reason grants you immunity to the law. The issue for publishers goes far beyond the potential to lose sales to would-be customers, as the business aspects of game development closely relates more to playing the stock market than it does just developing a video game. With rising costs for development, the prospect for a publisher to invest in a titles falls down to the possibility that they will see a return in the cost of development before the title even starts its first day of production. This means that the install base for a console or handheld becomes the leading number to determine the amount of sales that are possible for that given system. But, when a product becomes hacked, the amount of possible sales becomes skewed as the number of potential buyers is now affected by the percentage of those who could pirate instead of purchasing a copy. This variable in the sales could seem marginal to most consumers, but, in reality, it is the equivalent of a variable that can range from very low, to significantly high. That possibility has deterred publishers from systems like the PSP, and in the opinion of some people caused it to become unsuccessful from a development standpoint.

Looking toward the future, there is a shining light at the end of this tunnel, as one of the biggest proponents driving piracy will actually be the method of circumventing it, high bandwidth. As much as was previously stated, Cloud gaming will become a viable option for many developers to prevent their products from being digitally stolen, but before that option even becomes viable, there will be other factors limiting the need for some to pirate. This is mainly getting down to requiring less from a consumer to obtain a title, and therefore making the ease of purchasing outweigh hassle of ‘cracking’ a pirated game. This business concept is already being utilized on PCs through Valve’s online market Steam, which has already made the ability to purchase PC games easier than pirating.

Along with Steam being able to streamline the ability to purchase titles, the other driving force is the aggressive pricing the service does to push sales. Console developers like Sony and Microsoft are still understanding the need to push digital sales, as both markets are still vastly behind retail sales, making the utility of digital content mute for now. Hopefully once online services become more of the norm for both consumers and developers, not only will the ability to pirate drop, but also the need.

Are you a pirate? Do you feel justified? Or do you do think it’s wrong, but whatever, it’s free?! Let us know in the comments below, or copy and paste this entire article onto your own blog without crediting us, like so many sites do. Or, create fake @SebMoss and @Foolsjoker twitter accounts to see if you can get away with it.